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October 2015

October 24, 2015

As mentioned in just about every US newspaper, as well as on this blog, last month a company called Turing Pharmaceuticals and its apparently sociopathic CEO gained notoriety for buying the US distribution rights to an off-patent drug called "Daraprim" (the active ingredient of which goes by the generic name pyrimethamine) and then jacking up the price more than 55-fold, from $13.50 per pill to $750 per pill. Apparently the company's CEO figured that with a small market for the drug, it wouldn't be worthwhile for a competitor to jump into the fray with a cheaper alternative, and therefore Turing could withstand any negative press the price-gouging would engender, because, after all, profits are profits. But as we wrote at the time, "Logic would seem to dictate that if someone else can make and sell these pills for less and still make a profit, they will, and that the competition will force a correction in the price. However, the fact that the market for this drug is small may augur against such competition, particularly if the entry barrier is high. Time will tell."

Now it looks like Turing's CEO calculated incorrectly. On October 22, a company called Imprimis Pharmaceuticals issued a press release in which it announced that it would start selling pills containing pyrimethamine, combined with leucovorin (to offset a side effect of pyrimethamine) for under $1 each, even less than the price advertised for Daraprim by an online Canadian pharmacy. We've no idea if at this price Imprimis will profit, lose money or just break even from its pyrimethamine sales. If nothing else, Imprimis understands that the chance to play the hero is worth something.